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Annual Report 2016

Dear readers!

Unfortunately, 2016 is mainly remembered for its political turbulence. There is no doubt that politics also impacts the topics of competition and regulation. The focus has always been on the independence of competition authorities and regulators. Decisions must be politically autonomous and strictly adhere to legislation and economic analysis. However, a share of undertakings is owned either by the state or local government and it is vital to ensure the equal treatment of all undertakings, regardless of their ownership form. Among other things, the Estonian Competition Authority is analysing the situation in different sectors and the visions of the state or local government may differ here as well. It is very important that the Authority is able to handle any problems autonomously and give recommendations if competition and free entrepreneurship could be developed in some area of life.

In recent years, one of the main themes has been competitive neutrality. This means that upon providing public or local government services, the principle of free competition and entrepreneurship shall be followed. If the private sector is willing to provide some of the services with the same quality, but at a better price, neither the state nor the local government should prohibit this. Choosing the service provider must be done openly and under the conditions of fair competition. In several areas of activity, we are used to the fact that the service provider is the state or the local government. For instance, as a rule we do not think that the private sector could provide healthcare, social welfare or any number of public utility services. However, we should have the courage to handle these topics as well. The Estonian Competition Authority could not handle such politically sensitive topics if it was not autonomous.

The electricity and gas market directives of the European Union establish that the authority regulating this sector – in Estonia, it is the Estonian Competition Authority – must be both politically autonomous and not linked to undertakings operating in the sector. I am truly happy that such directive is also prepared for competition authorities. The draft legislation clearly establishes the requirement for the autonomy of these authorities. Estonia shall have the honour to hold the presidency of the Council of the European Union in the second half of 2017 and contribute to implementing this important directive.

I am pleased that the Estonian Competition Authority is a member of international networks and organisations and especially as a representative of a democratic, free country with a low level of corruption. I am even more certain that these are the main bases that make the Estonian Competition Authority successful and allow us to efficiently perform the tasks we have undertaken.

With best wishes,

Märt Ots
Director General